February 1990 – Violeta Barrios de Chamorro is elected president with more than 55 percent of the vote after pledging to bring Nicaragua "a revolution of honesty." In winning, the conservative Chamorro, leader of the National Opposition Union (UNO—Unión Nacional Opositora) and a former member of the ruling junta after the Sandinistas (FSLN—Frente Sandinista de Liberación Nacional) took over, upsets Sandinista leader Daniel Ortega, who had ruled since 1984. Before leaving office, Ortega distributes a wide variety of expensive, confiscated property to loyal members of his own party, a controversial and unpopular scheme derided as la piñata, after the papier-mâché animals that children break open to spill treats everywhere.
July 1992 – Comptroller-General Guillermo Potoy issues a 260-page report accusing 22 presidential staff members of stealing more than US$1 million from an internationally funded anti-poverty program. Part of the stolen money was said to have gone into a complicated scheme to bribe National Assembly legislators for their support on two crucial votes—one of which was to uphold a presidential veto of a measure that would have stripped Sandinistas of land confiscated during their time in power. Potoy demands that President Chamorro fire Antonio Lacayo, Chamorro's chief-of-staff and son-in-law, for involvement in the scandal. Lacayo shifted blame to his former aide, Antonio Ibarra, who was also implicated by Potoy's report. Ibarra, who had previously fled to Bolivia, was able to avoid extradition and eventually moved to Miami.
Summer 1992 – Sergio Ramírez, Sandinista leader in the National Assembly, charges Alfredo César, president of the National Assembly, with squandering US$212,000 in public funds on "secret expenses," such as travel and image consultants, since January. César responds by promising to reveal how Sandinista legislators stole US$5 million in 1990.
September 1992 – Forty-seven deputies from the National Assembly walk out in protest of a controversial Chamorro-sponsored property law reinforcing the confiscations of la piñata and the election of two legislative directors. Eight dissident members of the ruling UNO join 39 deputies of the opposition Sandinistas, plunging Nicaragua into virtual anarchy. The dissident legislators sue to nullify all actions of the Parliament since the walkout, and in late November the Nicaraguan Supreme Court rules in favor of their petition. National Assembly President Alfredo Cesar retaliates by refusing to recognize the ruling and by announcing a campaign to block international financial assistance to Nicaragua for 1993. In January 1994, UNO dissidents and the Sandinistas finally normalize their parliamentary relations.
February 1995 – The National Assembly passes a series of constitutional reforms that strengthen the legislature and weaken the executive. The reforms, opposed by Chamorro, include the transfer of taxation powers to the legislature, and prohibit family members of the president from running for the presidency. In July, after four months of conflict, Chamorro eventually approves the reforms.
October 1996 – Arnoldo Alemán, a coffee grower, lawyer, and former mayor of Managua (1990-1995), is elected president. Alemán revives a branch of former dictator Anastasio Somoza's Liberal Party, known officially as the Constitutional Liberal Party (PLC—Partido Liberal Constitutionalista), and leads it to victory over former Sandinista president Ortega. Alemán had been imprisoned by the Sandinistas on charges of conspiring to overthrow the government. Alemán serves as president until 2002.
1997 – The Supreme Court launches a five-year reform of the justice system. A number of their goals are eventually achieved by the end of 2002, including the passage of a new Criminal Procedures Code and a Judicial Organic Law, though revision of the Penal Code stalled in the National Assembly. Illegal enrichment is criminalized in June 2002, transparency and access are improved in the criminal justice system, and by the end of the campaign the Supreme Court removes 105 of the 300 judges in the Nicaraguan judiciary due to incompetence or corruption.
January 1997 – According to a personal financial statement, Alemán's assets increased 900 percent since he assumed office as mayor of Managua in 1990.
Early 1999 – After launching probes into Alemán's finances, television station Channel 2 and newspapers La Prensa and La Tribuna are audited by the government. The long, expensive process, which restricts the newspapers' ability to import raw materials such as newsprint or replacement printing parts, is assumed to be retribution from the president.
August 1999 – Using taxpayer money, Alemán throws a lavish engagement party for himself at the Biltmore Hotel in Miami. More than 300 guests, including most of the cabinet and leaders of various national institutions, arrive in Miami for the engagement party. Alemán, criticized for leaving Nicaragua during a time of crisis as a volcano devastated western Nicaragua, returned early from his trip.
November 1999 – Comptroller General Agustín Jarquín, the de facto anti-corruption czar, is arrested on fraud charges. A longtime foe of Alemán, Jarquín was discovered to have paid US$25,000 the previous year to a television journalist using a fictitious name, and evidence showed that more than 60 other journalists had been paid more than US$120,000 over the course of the last fiscal year. The US$25,000 check was cashed by Danilo Lacayo, the host of a popular morning television program that was later cancelled after the host was charged with fraud and criminal conspiracy. When pressed, Jarquín claimed that he had hired Lacayo to "research corruption," while Lacayo said that he was hired for "investigative work." European Union officials threaten to eject Nicaragua from a debt relief program unless the charges against Jarquín are dismissed. In December, an appeals court dismisses the charges and Jarquín resumes his position as comptroller general.
January 2000 – Alemán approves 18 constitutional reforms passed in December, entrenching power in his own PLC and the Sandinistas and blocking smaller parties from establishing a power base. The package includes measures that allow the two largest parties to stack government posts and the judiciary with their candidates, and assure criminal immunity for Alemán by giving outgoing presidents an automatic seat in the legislature—where members enjoy immunity from prosecution.
June 2000 – Alemán's tax collector, Byron Jerez, resigns after being accused of mishandling up to US$500,000 in government funds. Jerez allegedly used the money for the construction of a helicopter pad at his house.
November 2001 – Campaigning on a platform of anti-corruption, former vice president Enrique Bolaños earns 56 percent of the vote to become Nicaragua's president. Bolaños, who had been Alemán's vice president until 2000, pledges to investigate Alemán. Sandinista leader Daniel Ortega is the runner-up in the election, garnering 42 percent of the vote. A record 92 percent of the electorate turns out to vote, giving Bolaños and his PLC a majority in the 92-member National Assembly.
March 2002 – The attorney general accuses former president Alemán and other high-level officials of diverting US$1.3 million of funds from state-owned television station Channel 6 to businesses owned by Alemán, his relatives and associates. Money had been earmarked by the officials and was supposed to be shifted from government agencies to the station for modernization purposes, but it simply disappeared. Although accused of criminal activity, Alemán is not indicted due to the legislative immunity he enjoys as a member of the National Assembly. Alemán, who is president of Congress at the time of the accusations, denies any wrongdoing.
May 2002 – The National Assembly tables a judge's request to strip Alemán of the immunity he enjoys as a member of Congress.
August 2002 – The acting attorney general charges Alemán and others with diverting US$100 million of government funds to bank accounts owned by Alemán, his daughter (herself a substitute deputy in the National Assembly), and Byron Jerez, who had been minister of internal revenue until he was forced out after conducting questionable deals involving his brother's Miami business and an audit uncovered a US$200,000 hole in the tax agency's budget. Jerez allegedly used the funds to purchase a fleet of luxury cars. Several of the defendants had fled the country by the time the indictments were announced. By the end of 2003, Alemán had been convicted. Jerez was acquitted of the charges related to diverting government funds to Alemán, but was convicted for the deals involving his brother's business.
September 2002 – Prosecutors claim that Alemán stole more than US$97 million in state funds during his term as president—more than Nicaragua's annual expenditures for health care. Much of the money was said to have come from international aid related to the devastation linked to Hurricane Mitch in 1998. Alemán denied the accusations.
October 2002 – One-fifth of all Nicaraguans have signed petitions demanding that Alemán be stripped of his immunity.
October 2002 – It is reported that a US$13 million, internationally financed project of the Alemán administration to computerize Nicaragua's government payroll system had never been implemented. Officials claim the system was full of glitches. Bolaños seeks US$11 million in foreign aid to replace the system.
December 2002 – By a majority vote, the National Assembly votes to lift Alemán's immunity. A judge immediately places Alemán under house arrest at his ranch outside Managua and charges him with several counts of fraud, embezzlement, and money laundering, as well as looting the government of US$1.3 million earmarked for improvements to a state-run television station.
June 2003 – Jerez is sentenced to 8 years in prison for fraudulently diverting US$500,000 in government funds to finance his Miami companies.
August 2003 – After a judge rules that house arrest is too expensive, Alemán is placed in jail.
November 2003 – Alemán is released and put back under house arrest due to health reasons including obesity, diabetes, and high blood pressure. The United States condemns the release order as "a politically manipulated decision" and suspends a US$49 million aid package to reform the country's judiciary.
December 2003 – A federal judge sentences Alemán to 20 years in prison—later changed to house arrest due to his ill health—for money laundering, fraud, misappropriation of public funds, criminal association, and electoral violations. In addition, Alemán is stripped of his ability to serve in Congress and fined US$10 million. Members of Alemán's PLC charge that the sentencing judge, a former member of the Sandinista secret police, was biased in her opinion.